Bravo! This is without a doubt the most important episode of LOST so far, which in my book, makes it the most important hour of television ever. If there were any doubts as to the philosophical or literary value of this series, there are no longer. This one episode encapsulated the show's entire core mythology into a microcosm—not only of the show's central struggle—but also of the deepest struggle of man.
In the universe of the show, the Island is a real place (despite Richard's frustrated assertion that they are all dead and in Hell), but it symbolically represents a sort of Purgatory in its function. The people who are brought to the Island are not there to be punished, but to be tested. Jacob insists that the people who he brings there get a clean slate, a chance to start over. This is not an intervention like an absolution, which forgives sin, but a chance to turn from one's wicked ways without the influence of social pressures keeping him in sin.
Jacob believes that people have free will, and should not be forced to do what is right. In this case, "free will" means the freedom to choose to sin or not to sin. To work as Jacob believes it will, this freedom demands first the desire to do good, then the ability to know the difference between good and evil. By contrast, the Man in Black believes it is in the very nature of man to sin, and that to allow him free will is to hasten his corruption. He therefore seeks to destroy the people that come to Island, with the notable exception of those who he can manipulate into killing Jacob.
The interesting thing about this dichotomy, as Richard points out, is that if Jacob refuses to intervene then the Man in Black will. Jacob's absence on the playing field means that the Man in Black is free to cloud the distinction between good and evil (no pun intended), which he does to Richard when he says that Jacob as the devil. He uses Jacob's own philosophy of free will to paint him as a monster who brings people to their death, when the reality is that the Man in Black is largely responsible for their deaths.
As for the desire to do good: traditionally, doing good (or at least being good) is connected with going to Heaven (and hence not going to Hell). Going to Heaven is full of rewards, such as the reunion with loved ones, and is therefore the motivation to do whatever one's belief system requires (in short, doing good). Richard's challenge was that, while he had no malice in his heart, he accidentally killed a man while trying to save his dying wife. His religion (apparently Catholicism) gave him no options to go to Heaven, because he could not be absolved of murder. Therefore, even though he was not evil, he lacked the motivation to do good, and was susceptible to evil's influence.
Jacob promised him the only escape from Hell that was available to him when he made Richard immortal. After Jacob's death, Richard struggled with understanding his purpose. In this episode, he decides to seek out the Man in Black, and take the offer he had given so many years ago. The Man in Black had given Richard the hope that his wife was taken by the devil (Jacob). Whatever Richard had believed about Jacob seemed to vanish with his death, and he ran back to the very place where the Man in Black made his promise. It was there, that the ghost of his wife (communicating through Hurley), gave him a new purpose.
So it is ultimately his true love which is his proverbial "north star." Symbolically, this is genius! Amid all the fiction that puts the pursuit of the "golden haired woman" as the purpose of a man's life, LOST defies convention with truth. A man's wife is his soulmate, his helper, his guide—she is not his purpose, but his partner in fulfilling it. This episode is the answer for all the ambiguity between good and evil throughout this series. All the power and magic comes from the characters' respective purposes and true loves. After all, these are the things that are eternal.
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